Judge approves request to force Global Care into Ch. 7
By Furniture Today Staff -- Furniture Today, January 11, 2010
MIAMI — A U.S. Bankruptcy Court judge has granted a request to force furniture protection provider Global Care Solutions into Chapter 7 bankruptcy proceedings, but the company is asking to convert the case to a Chapter 11 filing.
If granted, the conversion would allow Global Care to continue to operate while working out a plan to repay creditors. The company would be forced to liquidate if the case remains a Chapter 7 proceeding.
The case began in August, when two Global Care sales representatives and a supplier filed a petition to force the company into Chapter 7 bankruptcy, claiming they were collectively owed more than $142,000.
Global Care, which markets furniture protection as Stainsafe, Leather Master and other brands, was formed in 2008 with the merger of Stainsafe and Multimaster.
According to documents filed in bankruptcy court, most of its largest creditors are suppliers and technicians who were sent to consumers' homes to investigate warranty claims and remove stains the consumer was unable to remove.
The largest unsecured creditor is Federal Warranty Service Corp., which is owed $790,000.
According to court documents, the company has about 25,000 outstanding warranty claims from consumers.
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